MCQ Questions
Q.1.
There is a gap in the oligopolist's marginal-revenue curve because
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    match price cuts, but ignore price increases.
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    the slope of the demand curve changes abruptly.
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    price competition can lower revenue for all firms.
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    firms expect any change in price will lower revenue and profits.
Q.2.
The most common reason that oligopolies exist is
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    a lack of explanation for how the initial price is set.
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    economies of scale.
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    Collusive pricing is economically desirable from the oligopoly's viewpoint because it results in monopoly profits.
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    the slope of the demand curve changes abruptly.
Q.3.
Shortcomings of the kinked-demand model include
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    price competition can lower revenue for all firms.
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    has few firms, whereas monopolistic competition has more firms.
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    the slope of the demand curve changes abruptly.
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    a lack of explanation for how the initial price is set.
Q.4.
The kinked-demand curve for oligopolists assumes that rivals will
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    price competition can lower revenue for all firms.
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    the slope of the demand curve changes abruptly.
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    match price cuts, but ignore price increases.
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    firms expect any change in price will lower revenue and profits.
Q.5.
Oligopoly differs from monopolistic competition in that oligopoly
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    firms expect any change in price will lower revenue and profits.
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    price competition can lower revenue for all firms.
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    the slope of the demand curve changes abruptly.
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    has few firms, whereas monopolistic competition has more firms.
Q.6.
Which of the following is a shortcoming of concentration ratios as measures of monopoly power?
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    They do not account for interindustry competition.
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    the slope of the demand curve changes abruptly.
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    Automobiles, personal computers, and gasoline
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    price competition can lower revenue for all firms.
Q.7.
Assess the economic desirability of collusive pricing.
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    economies of scale.
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    Collusive pricing is economically desirable from the oligopoly's viewpoint because it results in monopoly profits.
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    price competition can lower revenue for all firms.
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    a lack of explanation for how the initial price is set.